From Electrical Apparatus: Going Beyond EVs—Featuring Phil Dunne

In recent years, advancements in alternative fuels and technologies, including EV and hydrogen fuel cell technologies, have taken the transportation industry by storm. With ongoing efforts, commercial fleets and individual consumers are vetting these alternative fuels and technologies and determining their use and viability for transportation. And as vehicle manufacturers make statements concerning how soon they will be eliminating internal combustion engine (ICE) technology and embracing these alternative energy options, what the future of the alternative energy vehicle industry will look like is anyone's guess.

Faced with high-energy costs, environmental concerns by consumers. and government regulatory measures, the world's leading automakers are embracing new technological advancements to make today's vehicles more fuel-efficient and environmentally friendly than ever before. One alternative vehicle technology, electric vehicles, is making inroads in the minds of consumers who are eager to "go green" and leave a smaller carbon footprint. But are EVs truly the way of the future or are other alternative energy sources going to emerge as the key method by which vehicles operate?

In the West, EVs not a priority

Irina Tsukerman, business and geopolitical analyst, president of Scarab Rising, Inc., a media and security strategic advisory, and program vice chair of the American Bar Association's Oil and Gas Committee, said that many of the Western EVs are being placed on the backburner.

"GM last year invested nearly $4 billion for ICE vehicles despite previously pledging to 'go all in' on EVs, whereas BMW, Toyota, and other manufacturers have switched over to hydrogen-based cars. And Tesla, despite slashing prices, has been radically underperforming on the market for the past year. So, while the number of EVs produced has risen, the expectations for the percentage as well as absolute numbers of Western-made EVs and even EVs in general have not been met," Tsukerman said.

The U.S. continues to experience a very slow rise in EVs due to the fact that most people in the country simply do not have the charging equipment that could meet the demand. Rental companies like Hertz are increasingly burdened with EVs that are seen as a liability for long-distance travel.

"On the other hand, the rise of EV vehicles in government fleets like buses is linked to specific subsidies and other policies encouraging reliance on EVs," Tsukerman said. Moreover, technical issues in places like New York City have caused significant security concerns. These issues included 13 deaths by fires from the EVs in the first seven months of 2023 in New York City alone, aside from injuries, as well as two recalls and production-related strikes, which have likewise caused delays.

"Electric vehicles are facing multiple setbacks in the early weeks of 2024, including slowed demand and unreliable charging networks,'' Tsukerman said. "On the other hand, developing economies and booming states like India find manufacturing relatively cheaper EVs (with raw materials easy to access), an easy source of quick income."

EVs versus other options

Tsukerman says that hydrogen-based cars and EVs with alternate batteries such as the sodium-ion batteries currently breaking into Japanese manufacturing are the future of "going green," despite cost-related barriers to R&D at the moment.

"And a return to the hybrid model, which combines the best features of EVs and ICE vehicles without the expense and the raw material limitations, may be forthcoming," Tsukerman said. In terms of the immediate benefits of EVs, these include smaller carbon footprint, lower operating costs (excluding the costs of dealing with fires and weather-related issues), lower maintenance needs and costs, high performance/energy efficiency, convenience of charging at home (which explains the popularity of EVs among short-distance Uber drivers and other car-sharing drivers), and EV-only parking spots. The cons include EV charging station shortages and general inefficiency, the limitations on driving range at full charge, higher initial purchase cost, high battery replacement costs, low endurance at low temperatures, and the propensity towards fire hazards.

Tsukerman further stressed that EVs are arguably a potential future contributor to an energy crisis. This is due to the reliance on expensive raw materials that are difficult to procure and which the U.S. and other Western countries are not likely to be able to manufacture independently in sufficient quantities and break through the market due to associated geopolitical and commercial limitations.

"The process of electrification is costly, inefficient, linked to assorted secondary concerns, and is a huge strain on power grids," Tsukerman said. ''Without investing into building up relevant infrastructure, mass expansion of EV use can contribute to blackouts like the ones becoming more frequent in California, and electric grids, if not managed properly, are an easy target for cyber attacks. Moreover, the process of electrification is not necessarily any more environmentally friendly than natural gas, which is considered a 'clean' energy option in Europe."

Skepticism about EVs

John Berman is founder and chief investment officer of Berman Capital Group, an investment management company that employs multiple strategies focused on global opportunities in traditional energy, renewable energy, minerals, infrastructure, and carbon credits.

Berman said EVs are not better for the environment than ICE vehicles: the pollution is just outsourced to other parts of the world. "All the additional mining required to get the battery metals requires diesel-powered mining equipment, and the mining is often done by Chinese companies in places like the Congo, not known for their rigorous environmental standards," Berman said. "Additionally, most EVs are charged by electricity that was generated from the burning of coal or natural gas, so they're not nearly as 'green' as the marketing material would lead one to believe. If we build out our grid with cleaner energy sources like nuclear for base load power generation, then EVs will become the "greenest" option, but I think that is a story that will be told in decades, not years."

However, as Phil Dunne, U.K. managing director at the global strategy consulting firm Stax, explained, the general population is still wary of EVs, with concerns around range, charging infrastructure, second-hand values, etc. "Huge improvements are going to come over the next five years as new battery technologies evolve. Lithium-ion batteries are the current standard, but there are already a number of different technologies, including lithium iron phosphate and lithium nickel manganese cobalt, which each refer to different materials used in the cathodes and anodes linked by a liquid electrolyte," Dunne said. Changing the chemistry using different cathode and anode materials operating within a liquid electrolyte can change the efficiency impact.

Dunne said the next big improvement will come with solid-state batteries that replace the liquid electrolyte with a solid. The emergence of production-ready solid-state batteries is currently being developed by Toyota and Volkswagen for anticipated scale production by 2027. "We are also going to see huge changes in charging infrastructure and recycling EV batteries through secondary use as stationary storage units to recovery of the constituent materials for reuse in next-generation batteries," Dunne said.

The long-term promise of hydrogen

So what role is hydrogen expected to play in the future of vehicle development? As Tsukerman explained, hydrogen cars, if the development cost barrier is overcome, seem more promising in terms of suffering from fewer of these shortcomings — being less dependent on raw materials, having longer driving range, better function at low temperatures, and better safety. "The charging issue is also less likely to be a burden as are over-all costs to consumers," she said.

However, due to the impact of lobbying, the U.S. has almost completely oriented its markets towards electrification in absolute numbers despite recent government efforts to push for hydrocarbons.

"Hydrogen will take a long time due to costs of R&D and the fact that there are only five leading countries, and none have invested sufficiently to make hydrogen into an immediately available reality," Tsukerman said. Countries like Morocco need huge amounts of direct investments to develop the infrastructure for hydrocarbon manufacturing. And while Saudi Arabia has the means to push this issue heavily, it lacks the know-how to move hydrocarbons to the forefront of R&D in the foreseeable future. Tsukerman added that this means hydrogen leaders will need to work closely together and coordinate their efforts to turn hydrogen into reality. "Japan is leading on the hydrogen-based vehicular breakthroughs but lacks the lobbying clout to sell the product and to attract sufficient investments that would make ROI worthwhile in the short term," Tsukerman said. "Moreover, it is heavily reliant on imports of hydrocarbons for its R&D, and those are expensive due to the lack of overall global investments."

However, at least as it relates to ground transportation, Berman believes EVs are here to stay.

One case for hydrogen that he sees is using it for aircraft, as lithium-ion batteries are too heavy to supply all the energy an airplane needs for a flight, but he thinks that reality is also decades away before that becomes the industry norm. "I think in the near term (next 10 years), hybrid vehicles will gain more traction, especially in commercial vehicles (freight trucks, mining equipment, etc.), as current battery technology can't provide the range that these kinds of trucks need," Berman said. Overall, Berman does not think that there are other viable options as far as decarbonization is concerned (other than more fuel-efficient ICE vehicles), but we are seeing that EVs currently still have real limitations that make it hard to compete with ICE vehicles.

"Hydrogen fuel cell-powered cars have not really been able to compete with EVs because of the hydrogen infrastructure that would be required, which is much more complicated (transportation of compressed hydrogen) than the charging infrastructure required of EVs," Berman said. "In the long-term, nuclear is the only viable low-emissions power source; the public perception of nuclear has been badly damaged but it really is an extremely safe technology." Public perception of nuclear seems to be coming around a bit, but only time will tell. As Berman explained, other than hydroelectric, nuclear is the only technology that can produce emissions-free base load power generation.

"The energy transition is going to take decades longer than many people want to believe. In the meantime, there should be additional investment in natural gas to replace coal-powered plants." Berman said. ''While natural gas does produce emissions, it produces far less than thermal coal, and natural gas is the least bad option. There are a lot of limitations to renewable energy (limited battery storage capacity, and intermittency), which may be solved with time, but the perfect is the enemy of the good in the effort to decarbonize."